(Bloomberg Opinion) — Nov. 3 was a sad, sad day for China. Not because America’s election changes anything about its hawkish stance toward Beijing — that’s bipartisan — but because China lost a golden investment opportunity by shooting itself in the foot. Looking purely at the numbers, China is in a sweet spot right now. Its bonds are attractive, as the yield differential with U.S. Treasuries hovers near a five-year high. Beijing’s virus-containment strategy is working, and the economy has bounced back. Meanwhile, President Xi Jinping’s latest five-year economic blueprint, which favors innovation and domestic consumption, is a win for tech companies — exactly the kind of growth stocks investors love. Foreigners have been buying the China story this year, even as President Donald Trump threatened to sanction and delist mainland companies. They are crowding into Beijing’s sovereign issues at a record pace, promising to overtake domestic city commercial banks as the second largest purchasing bloc. Global investors need to have “a significant portion” of their portfolios in Chinese assets, both for diversification and short-term tactical gains, said Bridgewater Associates LP founder Ray Dalio. (Dalio says as he understands it, events were progressing faster than regulators were comfortable with, which led to their actions. “So I assure you that Chinese regulators’ move to curtail Ma’s IPO was not my worst nightmare, and I certainly do not believe that it will have any notable effect on the evolution of China and its markets.” To read his full statement, click here.)The Shanghai Stock Exchange’s surprise suspension of Ant Group’s record-breaking initial public offering Tuesday night changed the landscape entirely. Two weeks earlier, the company’s billionaire founder Jack Ma made a sensational speech, saying China’s financial system and regulatory framework are broken. On Monday, Beijing’s top financial watchdogs summoned Ma and dressed him down. Then they issued new draft rules to rein in Ant’s lucrative consumer loan business. It’s episodes like this that remind us how capricious and thin-skinned Beijing’s policy makers can be. Regulators have been debating whether to allow online microlenders to act as simple matchmakers (rather than traditional lenders, which require capital buffers), for a good two years. Why the sudden change of heart two days before Ant’s much-anticipated trading debut? The fintech giant had already raised at least $34.5 billion from its dual listing in Hong Kong and Shanghai. Now, it has to return billions of dollars to its IPO subscribers. Somehow, Beijing has proved Ma’s point: China’s bureaucrats don’t know what they’re doing. To govern well, you can’t pick and choose when and how hard to regulate; the secret sauce is consistency. Beijing is looking as childish and moody as Trump on the day of the U.S. election. While Jack Ma’s botched IPO is the big story, there are plenty of obscure examples that also matter to long-term investors. Consider instead the so-called keepwell clause. This “gentlemen’s agreement” is a common feature of China’s $790 billion dollar bond market, and in theory protects investors in the event of default. In September, a Beijing court rejected the recognition of the keepwell deed for a conglomerate’s dollar bond. Two months later, a court in Shanghai ruled to accept this provision for an energy trader. China’s stance on keepwell is anyone’s guess. This is the problem with investing in China. First, assumed rules can be broken at whim, especially when policy makers fear they are losing face. Second, after Ma’s troubles, what billionaire executive will want to speak up? It’s much better to be supplicant, keep quiet and busy yourself making money. Sure, China has many attractive traits, but you’d better be prepared to stay in perpetual crisis mode. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron’s, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Biden has proposed raising the capital gains tax rate from 20% to 39.6% for those making over $1 million, which would represent a big blow to the asset management industry. Other tax hikes he has put forward include increasing the statutory corporate income tax rate from 21% to 28%. Biden was leading in key Midwestern states in the race for the White House as votes were being counted on Wednesday afternoon, but President Donald Trump’s Republican Party was poised to keep control of the Senate even as Democrats retained their majority in the House of the Representatives.
American depositary receipts of China’s electric-vehicle maker Nio Inc. extended their rally on Thursday, also lifting ADRs of competitors Li Auto Inc. and XPeng Inc. a day after analysts at Citi raised their price target on Nio and started coverage of Li and XPeng. The Citi analysts lifted their target on Nio’s ADR price to $46.40, from $33.20, “to factor in our increasingly positive sector outlook, and the higher upside prospects from the (Nio’s) autonomous driving subscription business model,” they said in a note this week. The target implies an upside around 17% from Nio’s Thursday prices. The analysts rated Li Auto at the equivalent of hold, saying that the company will break even in 2022 thanks to sales volume growth and margins improvement. Citi rated XPeng at buy, expecting the company to post 57% sales volume growth in the next five years and break even in 2024. Nio’s ADRs have gained 900% this year, compared with gains around 9% for the S&P 500 index. XPeng’s BEV market share to double to 6% by 22E We expect XPeng’s market share to surge to 6% of China’s BEV sales in 22E, from 3% in 20E, given its 1) competitive products with highest NEDC range in the market (P7: 706m/charge), 2) rapid autonomous driving technology development (Current: L2, 1Q21: L3) with more frequent upgrades providing higher visibility, 3) its position as one of the few suppliers with FOTA upgrade capability (delivering best-in
Tell that to Jack Ma. Corporate China’s shiniest star was just days away from seeing his Ant Group list on the stock market in a record $37 billion deal, when he chose to launch a blistering public attack on the country’s financial watchdogs and banks. The regulatory system was stifling innovation and must be reformed to fuel growth, billionaire Ma told a summit in Shanghai on Oct. 24 attended by the great and the good of China’s financial, regulatory and political establishment.
(Bloomberg) — Royal Dutch Shell Plc will begin shutting its Convent refinery in south Louisiana mid-month while it continues to seek a buyer for the facility, part of a plan to reduce its global sites and focus on combined oil refining and chemical plants.With global demand and profits stung by the spread of Covid-19, the shutdown of 53-year-old Convent, which has about 675 employees, is part of Shell’s larger strategy to shrink its portfolio to six facilities from 14 by 2025, Shell said in a statement. The remaining sites will have integrated oil refineries and chemical plants.Shell plans to “invest in a core set of uniquely integrated manufacturing sites that are also strategically positioned for the transition to a low-carbon future,” according to a statement Thursday. “A key advantage of these core sites will also come from further integration with Shell trading hubs, and from producing more chemicals and other products that are resilient in a low-carbon future.”The decision to shut the 211,100 barrel-a-day Convent facility comes amid a spate of refinery closures in the U.S. from operators including Marathon Petroleum Corp. and Phillips 66, with some sites permanently shutting and others being converted into renewable diesel plants. Shell is trying to sell operations in Puget Sound in Washington and Saraland, Alabama. The company completed a sale of its Martinez refinery in the San Francisco Bay area to PBF Energy earlier this year.In September, Shell said it would retain six facilities that have both an oil refinery and chemical operations, including Norco in Louisiana and Deer Park in Texas, Rheinland in Germany, Pernis in the Netherlands, Pulau Bukom in Singapore and Scotford in Canada.In Louisiana, Shell will retain its refinery and chemical sites in Norco and Geismar, its midstream infrastructure assets, branded retail presence, Gulf of Mexico operations and offices in New Orleans.The so-called crack spread, which measures the difference between gasoline and diesel over West Texas Intermediate, was trading around $8.75 a barrel Thursday, down from $14.67 at the same time last year.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
On CNBC’s “Mad Money Lightning Round,” Jim Cramer said Bloom Energy Corp (NYSE: BE) is way too speculative for him. In the power management, he prefers Generac Holdings Inc. (NYSE: GNRC) on the power side and Eaton Corporation PLC (NYSE: ETN) on the management side.Magnite Inc (NASDAQ: MGNI) is a pure spec, said Cramer. He would rather buy a fraction of the share in Alphabet Inc (NASDAQ: GOOGL).Oracle Corporation (NYSE: ORCL) is fine, thinks Cramer. He prefers salesforce.com, inc. (NYSE: CRM) because it has a faster growth and it is doing better.Cramer is concerned about AT&T Inc. (NYSE: T) balance sheet, but the company is doing things to alleviate the pressure so he would give it one more quarter and then he will consider buying.See more from Benzinga Click here for options trades from Benzinga ‘Fast Money Halftime Report’ Picks For November 4 Mike Khouw Sees Unusual Options Activity In SPY(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
In a decision on Wednesday, U.S. District Judge Yvonne Gonzalez Rogers said shareholders led by a UK pension fund can sue over Cook’s comment on a Nov. 1, 2018, analyst call that while Apple was facing sales pressure in some emerging markets, “I would not put China in that category.” Apple told suppliers to curb production a few days after Cook spoke, and on Jan. 2, 2019, unexpectedly cut its quarterly revenue forecast by up to $9 billion, which Cook blamed in part on pressure on China’s economy from U.S.-China trade tensions.
Just as there are several states with no income taxes, there are also multiple states forgoing sales taxes. These states don’t impose state-level sales taxes, meaning you won’t be assessed an additional fee when purchasing a retail good or service. … Continue reading ->The post 5 States With No Sales Tax appeared first on SmartAsset Blog.
Amazon Inc (NASDAQ: AMZN) CEO Jeff Bezos has offloaded $3 billion worth of the e-commerce company’s shares this week, according to filings with the U.S. Securities and Exchange Commission on Wednesday.What Happened: Bezos’s beneficial ownership filings show that a total of one million common stock shares were sold on Monday and Tuesday. The transactions were part of Amazon’s 10b5-1 trading plan — a strategy that allows company insiders to sell stocks at preset parameters.With the recent sale, Bezos has sold off more than $10 billion worth of Amazon shares this year, but still holds over 10% stake in the tech company.In August, the billionaire entrepreneur and investor sold off billion worth of shares in the price range of $3,102.85 and 3,183.26. Bezos had earlier sold shares worth about $4.1 billion between January and February.Why Does It Matter: Bezos, in 2018, disclosed that he sells about $1 billion worth of Amazon shares annually to fund Blue Origin LLC — the aerospace equipment manufacturing company he founded in 2000. In 2019, Bezos had sold Amazon common stock worth around $2.8 billion.Benzinga’s Take: Bezos isn’t selling his shares on the open market, and 10b5-1 sales like these are common for the Amazon CEO to fund other ventures of his interests, including Blue Origin and philanthropic work. This event doesn’t necessarily reflect Bezos’s views on Amazon’s future stock performance.Price Action: AMZN closed 6.32% higher at $3,241.16.Photo courtesy of Seattle City Council via FlickrSee more from Benzinga Click here for options trades from Benzinga Spotify Rolls Out Standalone Streaming On Apple Watch App: TechCrunch A Chinese Company’s Stock Is Surging — Thanks To Trump(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Dropbox Inc. shares were initially up 8% in after-hours trading Thursday before dropping into negative territory after the maker of document-management software reported fiscal third-quarter results that topped Wall Street estimates. Dropbox reported net income of $32.7 million, or 26 cents a share, compared with a loss of $17 million, or 13 cents a share, in the year-ago quarter. Revenue improved 14% to $487.4 million from $428.2 million a year ago. Analysts surveyed by FactSet had expected net income of 18 cents a share on revenue of $484 million. Dropbox shares are up 12% this year. The broader S&P 500 index has climbed 9% in 2020.
Square Inc. shares gained in after-hours trading after the company reported better-than-expected earnings for the third quarter and noted that in-person payment volume for October was up relative to a year earlier.